Crypto Firm Grayscale Turns to Goldman Alumni for New CEO

(Bloomberg) — Michael Sonnenshein is stepping down as chief executive officer of Grayscale Investments after a decade-long tenure at the cryptocurrency asset manager and will be replaced by Peter Mintzberg later this year.

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Mintzberg, currently head of global strategy for asset and asset management at Goldman Sachs Asset Management, will become the new CEO on Aug. 15, Grayscale said in a press release. Meanwhile, Chief Financial Officer Edward McGee will lead the firm, Grayscale said.

Sonnenshein joined Grayscale in 2014 and served as CEO for the past three years. The company said he resigned to pursue other interests. The move was first reported by the Wall Street Journal.

During Sonnenshein’s tenure as CEO, Grayscale won a historic battle against the SEC, paving the way for the approval of the first spot Bitcoin ETFs. Grayscale has been trying to turn the Grayscale Bitcoin Trust (ticker GBTC) into an exchange-traded fund for years. Since the conversion, the fund has seen billions of dollars in outflows as investors flocked to newly launched, cheaper spot Bitcoin ETFs.

Read: Grayscale Plans New Bitcoin Fund as GBTC Loses Billions of Dollars

GBTC was once one of the only ways for investors to bet on the world’s largest cryptocurrency without purchasing the token directly; Assets reached nearly $44 billion in 2021.

GBTC has lost more than $17.6 billion since converting to an ETF in January. The other ten US spot Bitcoin funds have all seen positive inflows this year; BlackRock’s $15.6 billion investment leads in this. GBTC charges a 1.5% expense ratio, while other funds charge a fraction of that.

Sonnenshein said in a January interview on Bloomberg TV that GBTC’s relatively high fee was justified by the company’s “size, liquidity and history.”

“As an investor, when choosing between these products, fees are taken into account, the asset manager and the issuer behind it are taken into account, but size, liquidity and performance history should also be taken into account,” Sonnenshein said at the time.

The SEC rejected Grayscale’s proposal to convert GBTC in 2022, arguing that a Bitcoin-based ETF lacked sufficient oversight to detect fraud. Grayscale filed a lawsuit to overturn the decision, accusing the SEC of discriminating against its product when approving similar Bitcoin futures ETFs.

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Grayscale’s board of directors and parent company Digital Currency Group began searching for a new CEO in late 2023, according to the Wall Street Journal, citing people familiar with the matter. The call was not related to GBTC’s performance or exits, the report said.

“The crypto asset class is at an important turning point, and this is the right moment for a smooth transition,” Sonnenshein said in a press release.

–With help from Katie Greifeld.

(Updates throughout)

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